In December 2021, Government adopted the 25 recommendations contained in an Expert Group report, Partnership for the Public Good: A New Funding Model for Early Learning and Care (ELC) and School-Age Childcare (SAC).
The new funding model will support delivery of ELC and SAC for the public good, for quality and affordability for children, parents and families. To achieve this, there is a need for greater State investment and greater public management of provision. Recommendations 1-6 in the Expert Group report set out how Core Funding should be designed and implemented.
Core Funding is the new funding stream to start this partnership for the public good between the State and providers. Its primary purpose is to improve pay and conditions in the sector as a whole and to improve affordability for parents, as well as ensuring a stable income to providers.
Core Funding will operate alongside the National Childcare Scheme and the Early Childhood Care and Education programme and constitute additional income for providers on top of funding for these schemes, as well as income from parental fees.
The total budget for Core Funding is made up of four elements: an allocation for staff costs, including staff costs related to both contact and non-contact time and employer costs (€138 million); allocation for graduate premiums for graduate Lead Educators and Managers (€38 million); allocation for administration time (€25 million); and allocation for non staff overhead costs (€20 million).
This budget will be distributed to services based on two factors - the service's capacity (number of places, age group of children and hours places are available) and the extent of graduate leadership in the service. The majority of Core Funding (i.e. €183 million of the €221 million) will be distributed based on a service's capacity. This €183 million includes allocations for improvements in staff pay and conditions (€138 million), for administrative staff/time (€25 million), and a contribution to non-staff overhead costs (€20 million). It is important to note that PRSI, holiday, sick pay, and other employer costs, are factored in to the estimated staff costs allocation in Core Funding.
Non-contact time is therefore factored into the allocation in two ways. Firstly, data from the Annual Early Years Sector Profile on current amount of contact and non-contact time for different grades of staff was used to build in an allowance for non-contact time into the allocation for staff costs. Secondly, there is a separate allocation for administrative staff/time of €25 million.
In addition, a further €38 million is allocated to contribute to supporting graduates to be Lead Educators across ELC and to support graduates as Managers in ELC or combined ELC and SAC services. Heretofore funding has only been available in respect of graduate Room Leaders in the ECCE programme.
Core Funding is allocated to services based on the hours that the service is open and available to children. Core Funding is therefore related to the costs of delivery as this has been determined to be a fair and reasonable way to allocate the funding. Services opening for longer hours or offering more places will receive a higher value of Core Funding than services opening fewer hours or offering fewer places. This is because their costs of operation are higher.
Sessional services with standard capitation, Full Time, Part Time and School Age services will all see substantial increases in funding. Most ECCE services currently in receipt of higher capitation rates will also benefit significantly. The benefit is due to the combined effect of the base rate allocation for sessional pre-school services, the allocation of graduate premiums for Lead Educators and Managers, and the fact that allocations will be made based on capacity, rather than occupancy and most ECCE services do not operate at full occupancy. No service will lose out. I have issued a funding guarantee to ensure that no service will receive less in Core Funding that it previously received in higher capitation and programme support payments, if their circumstances remain the same. It is estimated that the funding guarantee will be required for just 1% services.
A Ready Reckoner has been launched to assist providers to understand the impact of Core Funding for their particular service. City/County Childcare Committees (CCCs) have received training in order to assist providers in calculating their potential Core Funding allocations. I would encourage providers to contact their local CCC for guidance and support in understanding the impacts and benefits of Core Funding for their service. Contact details for CCCs are available at myccc.ie/where-is-my-nearest-ccc.
It is important to acknowledge that Core Funding will intentionally address some of the existing disparities in funding levels across ECCE and non-ECCE provision, providing funding proportionate to the age ratio of children being cared for and supporting the employment of graduate Lead Educators across ELC provision as well as graduate Managers. This sees public funding for the employment of graduates in ELC will be more fairly distributed across the system.
In December 2021, I also launched Nurturing Skills: The Workforce Plan for Early Learning and Care and School-Age Childcare, 2022-2028. Nurturing Skills aims to strengthen the ongoing process of professionalisation for those working in early learning and care and school-age childcare.
In response to queries received by my Department on a number of matters, including many of those highlighted in the question , such as the impact of Core Funding on smaller Early Childhood Care and Education (ECCE) services, detailed information relating to Core Funding is now available at first5fundingmodel.gov.ie/core-funding.
The new funding model being implemented aims to transform the sector to one that is increasingly publicly funded and publicly managed, delivering a service for the public good, through a partnership between the State and providers, to the benefit of children, parents, practitioners, and society overall. This transformation starts with Core Funding and the new approach will entail a shift in the relationship between the State and providers in relation to delivering ELC and SAC, with new responsibilities on both sides. Core Funding is open to all registered providers subject to their agreement to the terms and conditions of the funding. It is my ambition that the maximum number providers choose to participate in this partnership to deliver ELC and SAC for the public good and come into contract for Core Funding. Core Funding however is optional for providers.
I look forward to working together in partnership with providers to deliver ELC and SAC services for the public good.
